- One AFFORDABLE monthly payment, without borrowing more money.
- FLEXIBLE – it can be changed to meet your circumstances.
- Expert negotiation of arrangements with your creditors where interest and charges could be frozen.
- Payment dates set for when is most convenient for you.
- Easy to manage program, WE deal with all creditor letters, phone calls & payments, YOU only deal with US.
Debt Management Fees
There are two fees associated with a Debt Management Plan.
1) The initial or “Setting up” fee
This fee varies depending on the complexity of your case, and will be no more than two times your monthly payment into the plan.
The fee covers the following work relating to the creation of your individual debt management plan:
- A comprehensive analysis of your financial circumstances, income and expenditure.
- Drawing up proposals for reduced repayments to your creditors based on what you can actually afford to repay.
- Compiling a financial statement on your behalf for presentation to your creditors
- Submitting the proposals and financial statement to all your creditors and negotiating with them to establish a programme of reduced repayments.
Please note that as the initial fee is not paid to your creditors, you will go into (or further into) arrears which may affect your credit rating.
2) The monthly management fee
This amounts to 16.99% of your monthly payments into the plan. The minimum payment is £37.50 and the maximum £100.
The monthly management fee covers the ongoing maintenance and administration of your plan including:
- Collecting your monthly payments and distributing them amongst your creditors in accordance with the agreement.
- Communicating with creditors on your behalf including responding to any queries or correspondence they may send to you.
- Drawing up and sending to you a monthly confirmation of payments made to your creditors.
- Providing you with a named point of contact to support you and answer any queries you may have throughout the term of your plan.
- Contacting you quarterly (or monthly if you would prefer) to review the progress of the plan and ensure that it continues to meet your financial circumstances.
- Maintaining a comprehensive record of your plan so that any queries from creditors can be resolved by us quickly and simply.
Illustration
Dave was struggling with combined debts of £12,775. He owed the following sums:
- Virgin - £3,253 (Contractual payment of £118 per month)
- HSBC - £4,664 (Contractual payment of £116)
- Barclays - £4,858 (Contractual payment of £100)
Dave was unable to keep up his combined minimum payments of £334 per month. When paying only what he could afford, he was incurring missed payment charges on each of his accounts and it would have taken him over 13 years to clear his debts. Dave contacted Churchwood Financial and we were able to help him draw up a budget which showed he could afford to repay around £220 per month after payment of his essential outgoings.
We agreed the following payments:
- A one off setting up fee £245
- Subsequent monthly payments of £220 to CWF of which £37.50 is retained as our management fee
- £46.47 to Virgin
- £66.63 to HSBC
- £69.40 to Barclays
We negotiated with the creditors on Dave's behalf and they agreed to freeze interest and charges which means that these debts will now be cleared in less than 6 years providing the reduced payments are met each month.
In total Dave will pay:
£12,775 in creditor contributions
£2,625 + £245 in fees
Total payments £15,645
What if I change my mind?
If, having decided to enter into a debt management plan, you then change your mind, we provide you with a cooling off period of 10 working days from the day you receive a copy of our terms and conditions. If you cancel the agreement within that cancellation period, you will receive a full refund of all the fees you have paid to us.
If you change your mind after the cooling off period has expired, you will still be able to withdraw from the plan, but you will not be entitled to receive a refund of the fees paid for the work we have undertaken.
Rescheduling debt over a longer term may affect your credit record and may lead to an increase in the total sum to be repaid.
